Ironically, Argentina is one of the richest countries in the world in terms of gas, but despite its vast gas reserves, the government is facing the very real possibility that the resource will have to be adjusted as the global energy crisis intensifies. from the continuing effects of the pains of the supply chain fueled by the pandemic and the ongoing Russian war in Ukraine. “Despite the fact that there are shale gas fields to compete with those in Appalachia, which made the US a major exporter, Argentina’s domestic gas sector has suffered from years of underinvestment that has left it unable to meet domestic demand, without compromising needs of the export market “, explains a recent report of BNN Bloomberg. Argentina has long dreamed of becoming a shale power plant thanks to its huge reserves in the huge Vaca Muerte slate game. However, a “chronically poor business climate” and a generally cash-strapped economy have resulted in industry underdevelopment and insufficient pipeline capacity to transport gas from remote Patagonia to urban and industrial areas, where it is increasingly desperately needed. . As a result, not only has Argentina not become a major exporter of LNG, but it has not even been able to consolidate its energy independence, relying on gas imports (mainly from the United States and Qatar). This has left Argentina competing with much larger economies for valuable liquefied natural gas (LNG) shipments to the international market as winter enters the southern hemisphere and energy demand is rising. BNN Bloomberg’s report, entitled “War Turns Argentina’s Shale Boom Dream Into Gas-Buying Nightmare”, explains that Argentina simply will not be able to afford the amount of LNG it needs. The country is already suffering from persistent shortages in the hard currency used to pay for imports, and skyrocketing fuel prices are leaving Argentina between a rock and a difficult position. “It will be a difficult winter ahead of us for fuel supply with access to hard currency in Argentina,” said Agustin Gerez, head of Argentina’s state-owned energy company Ieasa. This week, Chile’s brand-new president Gabriel Boric made his first official trip abroad to discuss fuel shortages with Argentine President Alberto Fernandez. Argentine Economy Minister Martin Guzman and Chilean Energy Minister Claudio Huepe Minoletti signed a joint statement on bilateral energy co-operation to address the crisis. The deal, however, does not serve to bring more gas to Argentina, but restores exports to Chile and outlines the rehabilitation of the Neuquen-Biobio pipeline. While this may bring some much-needed cash to Argentina’s economy, it does not help Argentina fill the LNG gap. If the shale sector were to develop to its full potential, Argentina could not only be energy independent, but could also sell surplus LNG. Achieving it would require a considerable amount of political support and investment, both of which were difficult to achieve in Argentina’s political history. And then there is the question of whether all this gas would not be better left on the ground in the face of the climate crisis. Finally, with the country’s narrow economy and global energy crisis continuing to cause market volatility, Argentina has few good choices. It will be a long, cold winter in Buenos Aires. By Haley Zaremba for Oilprice.com More top readings from Oilprice.com:
